Interactions between trade and environmental policies in the Czech Republic

Olga Kiuila

The Journal of International Trade & Economic Development, 2015, vol. 24, issue 7, 1014-1035

Abstract: The Czech Republic is obliged to implement pollution charges in accordance with the EU environmental policy. The charges may affect international competitiveness of the country, since they are applied to the domestically produced, but not to the imported commodities. We investigate how such environmental taxation of six main pollutants affects the Czech competitiveness. Using computable general equilibrium modeling with bottom-up approach, we consider a small-open economy with endogenous unemployment and ten types of taxes. A distinction between taxes on products and taxes on production is essential for analysis of a fiscal policy. Emissions reduction is possible in our model either through substitution with less polluting inputs, or a reduction of output, or through technical abatement. The last channel for emission reduction is ignored by other studies. The results show that the imports should not be affected by the tax reform, except for coal. Exports will increase in the non-energy-intensive and the biomass industries, but it will decrease in the chemical, the coal, and the metal industries. The overall effect on the trade balance is slightly negative. We conclude that investments in energy-saving technologies are necessary in order to preserve international competitiveness.

Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://hdl.handle.net/10.1080/09638199.2014.995208 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jitecd:v:24:y:2015:i:7:p:1014-1035

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638199.2014.995208

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().